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Nigeria’s debt servicing rises by 68.8% in H1

Published

3 months ago

October 7, 2024

The latest data from the Central Bank of Nigeria has revealed that Nigeria’s debt servicing reached N6.04tn in the first half of 2024, a remarkable increase of 68.8% over the N3.58tn reported during the same time in 2023.

This suggests that the Nigerian government’s debt servicing expenses were around three times higher than its staff expenditures throughout the review period.

The devaluation of the naira for international debt repayments is probably the primary cause of this steep increase in debt service requirements. The Federal Government is facing an increasing strain as repayment of debts takes up a substantial amount of its financial resources.

Personnel costs, on the other hand, increased 17.6% from N1.97tn in H1 2023 to N2.32tn in H1 2024.

Debt servicing is now nearly three times the government’s salary bill, according to this spending pattern, which raises questions about the sustainability of the debt profile of the nation and the mounting strain on public finances.

The overall amount spent on salaries in the first half of 2024 increased very slightly, despite the country’s rising cost of living.

Approximately 50% of the Federal Government spending in H1 2024 went towards debt service. The total amount spent by the government increased by 29.6% to N12.17 trillion in H1 2024 from N9.39 trillion in H1 2023. The increase in overall spending has led to a wider fiscal deficit, with N6.6 trillion in H1 2023 and N8.44 trillion in H1 2024 representing a 27.9% growth in deficit.

The government’s difficulty in managing its earnings and expenditures is highlighted by this expanding imbalance, which is made worse by the government’s mounting debt commitments.

Nigeria’s present fiscal trajectory may not be sustainable given the country’s ongoing expansion in the budget deficit and growing reliance on debt financing to make up for revenue deficits.

Recurrent spending, which includes staff compensation and debt servicing, increased by 51.4% from N6.72 trillion in H1 2023 to N10.17 trillion in H1 2024.

The burden of debt servicing, which currently accounts for a sizable amount of ongoing expenses, keeps the government’s finances tight.

In H1 2024, recurrent expenses alone more than doubled revenue, accounting for nearly 27% of retained revenue. This shows how much fiscal strain the government is under.

Capital expenditure, which is essential for long-term economic growth and the development of infrastructure, decreased by 25.3% from N2.68tn in H1 2023 to N1.99tn in H1 2024, despite an increase in overall spending.

VenturesNow

Moroccan annual inflation rises to 0.8% in November

Published

4 days ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

5 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”